Business rates recovery policy
This page was last reviewed on 1 November 2021.
We are committed to collecting business rates to ensure that the money is used for the benefit of all residents of the borough. If you do not pay your business rates, we will have to take further action to recover the money you owe. Our recovery policy lists all the steps we will take, together with the costs these will incur.
Purpose of the recovery policy
We recognise that the majority of people pay their business rates promptly. We use this money to provide essential services to local people.
This policy exists to explain how we will collect business rates debts so that:
- people who owe money know what is happening and why, and;
- people who pay their business rates promptly have confidence that we are committed to recover money owed to us.
- promote easy payment methods and payment dates, to prevent recovery action being necessary
- explain at every stage of the recovery process why action is being taken and what will happen if the debt is not paid. This information will be provided in the documents we send requesting payment. A summary of all our recovery methods (this document) will be published on the Bury Council web site. It will be in clear and simple terms and will not resort to legal jargon. We will provide free internet access to enable you to view this information. Paper copies of all recovery policies will be available on request
- ensure that before we start a recovery process with serious consequences, we have exhausted all other methods of debt collection
- publicise debt advice to all charge payers not just those with arrears, to help those in financial difficulty before arrears build up
- work with debt advice agencies to reach a repayment agreement
- ensure that we take account of vulnerabilities and that recovery measures are proportionate to a person's circumstances
- treat individuals consistently and fairly, regardless of age, gender, disability, race and sexual orientation
- review this policy annually. If there are changes in legislation relating to business rates that affect the recovery process the policy may be reviewed as their effects become apparent.
This policy relates to collection of business rates, also known as national non-domestic rates. They are collected by the Resources and Regulations directorate of Bury Council.
The recovery process is split into two parts. These are explained in detail in the policy statements later in this document.
The first part, up to and including granting of a liability order, is based on statutory legislation. This means that we follow the same processes for all people who are charged business rates. These processes are set out in government legislation. They are the same wherever your business is based in England.
The granting of a liability order by a Magistrates Court allows us to use more specialised recovery methods. These are tailored to your circumstances, and form the second part of the recovery process
Our recovery measures get more serious the longer you avoid or ignore our attempts to contact you. The easiest way to resolve the situation is to speak to us, discuss your debts and make a payment arrangement.
Arrangements will take into account the affordability and sustainability of payments. Wherever possible we attempt to recover a debt within the financial year it relates to. This prevents debts building up and being carried forward to subsequent years. Where this is not possible, we will try to reach an agreement that allows the payment of the continuing liability plus an affordable amount off any arrears.
Stage 1: Recovery processes up to and including liability order stage
Bills are sent annually in March each year for the following financial year, starting in April. We also send out amended bills throughout the year where there have been changes to accounts.
Each bill is due to be paid in monthly instalments. There are various payment dates, and options to pay in up to 10 or 12 monthly instalments.
We promote Direct Debit. This is the most efficient form of payment for the council and for customers. Other forms of payment are available. You have the option to change payment dates and payment methods to find the most suitable combination for your circumstances.
If you miss an instalment, we will send you a reminder notice. This gives you 14 days to pay the overdue amount.
If you bring your account up to date after we have sent you a reminder notice, but then miss another instalment we will send you a final notice. This will ask you to pay your full annual charge immediately.
The removal of the offer to pay by instalments reflects the fact that we are no longer confident that you will make future payments on time.
If your account was due for payment in full in one instalment and the amount due has not been received we will send you a final notice. This will ask you to pay the full amount due immediately.
Summons & liability orders
If you do not respond to a reminder or final notice, a Magistrates Court summons will be issued. If you respond to the final notice by making a part payment, a Magistrates Court summons will still be issued for the remaining balance. We will add the cost of raising the summons to your bill.
Following the issue of a summons, if the Magistrates accept that you owe the debt and that we have followed the correct recovery procedure then they will grant a liability order.
A liability order allows us to take the further recovery action listed below. Once we have a liability order we will look at your circumstances to decide the most appropriate way forward. We will
- confirm that your liability for business rates is correct;
- check that you are not entitled to any reliefs or exemptions;
- make all reasonable efforts to contact you by letter, phone or e-communications;
- provide contact details of free independent debt advice agencies;
- investigate your financial situation by checking the following:
- any Council held records, including any history of payment arrangements or payments received.
- HM Land Registry records.
- a credit reference agency, for information about outgoings and requests for finance, credit or mortgages.
- Companies House records.
All of the following recovery options are expensive and we will consider the relationship between the size of the debt and the amount of costs that will be incurred.
In addition, we will also consider if the recovery option is appropriate due to the following factors, which we are aware of:
- as a result of age, severe mental illness, disability or extensive learning difficulties you cannot be expected to deal with your own affairs.
- any other circumstances which you believe are exceptional and affect your ability to pay your debt.
Stage 2: Recovery process beyond liability order stage
Following the granting of a liability order, we will send you a letter, which asks you to either pay the debt in full or contact us to make a suitable payment arrangement within 7 days. The letter will not be sent if a suitable payment arrangement has already been agreed previously.
Enforcement agents (bailiffs)
In 2014 the government introduced new laws to regulate the work of debt collection companies. The new laws refer to debt collectors and bailiffs as 'enforcement agents'. In keeping with these regulations we now use this term to describe debt recovery companies we employ.
All enforcement agents we employ are certified through the County Court and follow a national code of conduct. A summary of the fees they charge can be found in Appendix 1
When enforcement agents receive our instruction, they will contact you by letter or phone asking you to either pay in full or contact them to discuss a suitable payment arrangement. When they receive our instructions they will add a set fee to your debt.
If you ignore the contacts from the enforcement agents, they will visit you at your home or business address. This visit will incur a further set fee. They will not add further costs for additional visits.
When the enforcement agent visits you, they will ask for payment in full, including all their costs. If you cannot pay the amount due in full immediately, they may agree a payment arrangement. To provide security the enforcement agent will make an inventory of goods that can be sold to repay the debt if you do not keep to your arrangement. This is called a 'controlled goods agreement'.
If your goods are subject to a controlled goods agreement you cannot move or sell them without the enforcement agent's permission.
If you fail to pay as arranged and you have signed a controlled goods agreement, the enforcement agent may re-enter your property, using force if necessary, to take the goods listed on the inventory. You will be charged a sale fee if goods are removed and sold plus other costs such as auctioneer's fees. This can add a significant amount to the costs that you will be liable for.
If a debt has been passed to enforcement agents and you pay us without including their fees, then they will continue to recover their costs from you.
If the enforcement agent cannot identify sufficient goods to clear the debt, or cannot gain lawful entry to your property, they will send a certificate to us to confirm that they have been unable to recover the debt.
Insolvency: Bankruptcy action
If you are liable to pay business rates as an individual or partner, we may decide to take bankruptcy action against you in the County Court if the total debt you owe to us is more than £5,000. If the court declares you bankrupt, you could lose your home and possessions to pay the debts and you may have to pay significant additional costs on top of the debt you owe to us.
We will send you a letter warning of proceedings we are going to take and give you a last chance to pay. If you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement, we will serve a Statutory Demand on you. This is the first formal stage in a process that may lead to bankruptcy.
If, without reasonable cause, you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement after the service of a Statutory Demand, we will then present a Bankruptcy petition against you.
If a Bankruptcy Order is made against you, the Official Receiver or a Trustee in Bankruptcy will be appointed and you may no longer have control over certain assets. You may find it extremely difficult to obtain credit in the future and your bank accounts may be frozen or closed. Certain professions may be affected by bankruptcy and you may face restrictions.
Insolvency: Compulsory Winding Up action
If you are liable to pay business rates as a company, we may decide to take Winding Up action against you in the High Court if the total debt you owe to us is more than £750.
As a director of a Company, you have responsibilities to ensure that the company does not continue to trade if it is insolvent. If you are unable to pay your debts as and when they fall due, that is evidence of insolvency.
We will send you a letter warning you of our intention to present a Petition and give you a last chance to pay. If, without reasonable cause, you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement, we will present a Winding Up Petition against you without further notice.
If the Court winds up your company, the Official Receiver or an Insolvency Practitioner will become liquidator of the company and the powers of the company directors cease. The company will cease to trade and all employment contracts of the company employees will be terminated. The conduct of the directors of the company may also be investigated.
If the combined balance of your debts owed to us is over £1,000 and you own the business property we can apply to the County Court for a charging order to be placed on it. This is similar to a mortgage and affects your credit rating. You will also incur additional costs and court fees.
If a charging order is granted it gives us two options:
- recover the debt and interest from the proceeds of sale if the property is sold at a later date; or
- ask the County Court to enforce its sale to recover the money owed
We will only consider this option if there is sufficient equity in your property to pay your debts when it is sold.
We will only consider committal proceedings if all other avenues of recovery have been considered and discounted. This means that we ask the Magistrates Court to decide whether to send you to prison for not paying your business rates.
If enforcement agents have been unable to remove goods to pay for your debt, or if we think other recovery options are inappropriate, we can send you a Magistrates Court summons to attend a committal hearing.
At the hearing, you will be asked questions about your income and expenditure and the reason(s) why you have not paid your business rates bills.
The Magistrates will consider if you are guilty of either:
- refusing to pay, when you could have done, known as 'wilful refusal'; or
- not taking appropriate action when you were billed, and recovery action was being taken, known as 'culpable neglect'.
At the hearing the Magistrates may sentence you to a term of imprisonment of up to three months. The sentence can be suspended on whatever terms the Magistrates consider appropriate. Usually this would be an order to pay a weekly or monthly amount. If the Magistrates decide that failure to pay was not due to wilful refusal or culpable neglect they have the power to remit all or part of the debt.
If you do not appear in court, we will ask the Magistrates Court to issue a warrant for your arrest without bail. This means that you will be arrested and either be taken straight to the Magistrates Court to appear in court or be taken into police custody to appear in court at a later date.
We charge fees because it costs us to take legal action to recover debts. These costs are added to your business rates debt. We then recover them together with your original debt.
The costs we charge are made up of payments we have to make to either the Magistrates Courts or County Courts, and what it costs us to carry out the recovery work.
External companies such as enforcement agents charge their own costs, which are payable to them. Enforcement agents are regulated and have to charge the same costs.
|Type of cost||Amount|
|Enforcement agent compliance (on receipt of our instructions & making contact with you)||£75|
|Enforcement agent visits (one fee is charged regardless of the number of visits)||£235 plus 7.5% of any balance over £1,500|
|Enforcement agent sale of goods||£110 plus 7.5% of any balance over £1,500|
|Bankruptcy petition||£1,292 plus service expenses and costs assessed by the Court|
|Winding Up Petition||£1,902 plus service expenses and costs assessed by the Court|
|Warrants of Arrest||£100|